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Without Help from Obama, New High-Speed Internet Subscribers to Fall 12 Percent in '09


TMCnews Featured Article

January 06, 2009

Without Help from Obama, New High-Speed Internet Subscribers to Fall 12 Percent in '09

By Michael Dinan, TMCnet Editor

In a disheartening vision of the economic recession’s potential reach, growth among high-speed Internet subscribers in the United States is expected to drop by 12 percent this year compared to last, according to new forecast from a Silver Spring, Maryland-based market research publisher.

Officials at Pike & Fischer say the figure represents about 5.7 million new customers, bringing the nation’s total to 74.5 million.
The slowdown is due to the economic crisis, which has raised unemployment while slowing down new housing. According to Scott Sleek (News - Alert), director of the firm’s broadband advisory services, consumers will have less money to spend on discretionary IT services such as high-speed connections.
Yet customer growth could expand if President-elect Barack Obama’s administration successfully expands broadband availability, Sleek said.
“Government initiatives, such as tax incentives and loan guarantees to help expand broadband infrastructure into underserved areas, could enable service providers to bolster their customer counts,” Sleek said. “In addition, policy-makers are likely to support training and education programs aimed at increasing customer adoption of broadband. These steps could offset what will be an inevitable slowdown in subscriber growth.”
Like many American industries, the technology and telecom spaces are looking to Obama to navigate the nation through the recession that the Illinois Democrat has inherited.
Many are optimistic.
As TMCnet reported, the VoIP market stands to gain a greater appreciation from the federal agency that regulates communications in the United States, according to one Washington, D.C.-based attorney who’s worked in telecommunications, media and technology for more than 25 years
According to Andrew D. Lipman of Bingham McCutchen LLP, VoIP also stands to get better carrier interconnection rights and recognition among policy-makers that the telecommunications world is evolving toward Internet telephony.
High-speed Internet providers also may be looking for some help, according to Pike & Fischer’s (News - Alert) new report, titled “Broadband Competition Outlook 2009.”
The cable industry will capture about 75 percent of new broadband subscribers, according to the report. While telephone companies such as Verizon and AT&T (News - Alert) are providing new fiber-optic Internet services that can exceed the speeds offered by cable, most of their service areas are covered only by DSL service, which consumers are increasingly spurning because its speeds are slower than cable, the firm says.

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Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael's articles, please visit his columnist page.

Edited by Michael Dinan

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